In an Order released May 5, 2005, the Federal Communications
Commission ("FCC") denied a Petition, filed by SBC Communications
("SBC") in February of last year, in which SBC requested forbearance
from Title II common carrier regulation applicable to "IP Platform
Services," which SBC defined as "those services that enable any
customer to send or receive communications in IP format over an IP
platform, and the IP platforms on which those services are provided."

The FCC found that it would be inappropriate to grant SBC's petition
because it asks the Commission to forbear from requirements that may
not even apply to the facilities and services in question. The FCC
also found that SBC's petition and the evidence in support thereof
were not sufficiently specific to enable the Commission to determine
whether the requested forbearance satisfies the requirements of
section 10.

Although SBC's petition asked the FCC to forbear from applying Title
II of the Act to IP Platform Services, SBC did not concede in its
petition that Title II currently applies to such services. SBC thus
acknowledges, in its forbearance petition that the Commission has not
yet decided the extent to which IP-enabled services are covered by
Title II and its implementing rules. In its Order, the FCC concluded
that SBC's petition was procedurally flawed because section 10 neither
contemplates nor permits grants of forbearance relating to obligations
that "may or may not" apply to the telecommunications carrier or
telecommunications service at issue.

The FCC also denied SBC's petition for the independent reason that it
was not sufficiently specific to determine whether the requested
forbearance satisfied the requirements of section 10. According to
the FCC, "we are unable to determine with certainty which services and
facilities SBC's petition is meant to cover, as well as the specific
statutory and regulatory provisions from which SBC seeks forbearance."
Without a clear understanding of the scope of the petition, the FCC
stated that it could not determine whether SBC's request for
forbearance satisfied the criteria of section 10(a) and that granting
SBC's petition under such circumstances would create regulatory
uncertainty.

Similarly, SBC stated that its petition was intended to apply only to
the "common carrier" provisions of Title II, but, according to the
FCC, SBC never clearly identified which specific provisions of Title
II for which forbearance was sought. According to the FCC, the degree
of uncertainty with respect to the intended scope of SBC's petition
would make it difficult, if not impossible, to determine that the
three prongs of section 10(a) had been satisfied.

For all these reasons, the FCC denied SBC's forbearance petition.

NECA PROPOSED TRS FUND CARRIER CONTRIBUTION

The FCC announced NECA's proposed Telecommunications Relay Service
("TRS") Fund contribution factor for the period beginning July 1, 2005
through June 30, 2006. NECA proposed a carrier contribution factor of
0.00528, and a fund size requirement of $413.3 million. The proposed
factor reflects a significant increase over the current factor, which
is $0.00356. TRS contributions are calculated based on interstate and
international telecommunications end user revenue, as reported in
interstate service providers' FCC Form 499-A.

FCC SEEKS COMMENTS ON PETITION TO PREEMPT STATE REGULATION OF TELEMARKETING

The FCC is requesting comments on an April 29, 2005, petition filed by
a coalition of 33 organizations, including trade associations,
individual companies, and non-profit entities engaged in interstate
telemarketing activities ("Joint Petitioners"). The Joint Petition
raises issues concerning the scope of the FCC's jurisdiction over
interstate telemarketing calls under the Telephone Consumer Protection
Act ("TCPA"). In particular, Joint Petitioners ask the Commission to
issue a ruling declaring the Commission's exclusive regulatory
jurisdiction over interstate telemarketing calls and barring state
regulation of such calls.

Joint Petitioners assert that, in the TCPA, Congress sought to
"establish uniform national standards that balance the concerns of
consumers with the legitimate interests of telemarketers." According
to Joint Petitioners, states have adopted and proposed "divergent
rules applicable to interstate telemarketing that undermine the
desired uniform federal regulatory regime." Citing dozens of existing
and proposed state laws that differ from the Commission's TCPA rules
and that do not distinguish between intrastate and interstate
telemarketing calls, Joint Petitioners contend that these state
regulations place "undue and at times impossible compliance burdens on
interstate telemarketers, and lead[] state courts in enforcement
actions to.impose substantial fines on telemarketers for interstate
calls expressly permitted by the federal rules."

To resolve this situation, Joint Petitioners ask the FCC to assert its
federal authority to preempt state laws and regulations which conflict
or are otherwise not in keeping with the federal program adopted
pursuant to the TCPA.

Comments on the Petition are due 30 days after publication of the FCC Notice
in the Federal Register.

In a further Notice of Proposed Rulemaking regarding payphone
services, the FCC is seeking current and accurate data on the average
number of compensable dial-around calls made from payphones on a
monthly basis in order to establish a new per call payphone
compensation rate.

In its First Payphone Order, the FCC fixed the default compensation
rate at $0.35 per call. This rate was recently increased to $0.494.

Data submissions in the form of Comments on the NPRM are due June 27,
2005 with Replies due July 25, 2005.

FCC IMPLEMENTS MANDATORY ELECTRONIC FILING FOR ALL INTERNATIONAL SERVICES

On May 11, 2005, the FCC ordered the implementation of mandatory
electronic filing for all international services.

Electronic filing has been the method of choice for many applicants
since establishment of the FCC's internet-based filing systems more
than six years ago. According to the FCC, the transition to mandatory
electronic filing for all international services will enable the
Commission to further streamline its filing processes, reduce
unnecessary costs associated with processing paper filings, and
respond more efficiently to evolving user needs.

The requirement for electronic filing will take effect in several
phases. First, mandatory electronic filing of applications for
international telecommunications services that can currently be filed
via IBFS will take effect following a 60-day transition period that
will begin this Spring. These include:

Next, in cases where electronic forms are not currently available,
mandatory electronic filing will be phased-in as IBFS is enhanced to
accept the filings. As each new electronic form is available, the
International Bureau will release a public notice announcing the start
of a 60-day transition period, after which only electronic filings
will be accepted. Paper filings made after the close of the
transition period will be returned to applicants without processing.

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